The role of local interactions in the diversification of neuropeptide phenotypes was studied in developing Xenopus brain, using in situ hybridization histo-chemistry. A highly localized appearance of pro- opiomelanocortin (POMC) cells was observed in the pituitary and forebrain suggesting the existence of a common POMC precursor that is anterior most in the neural plate. In another neuropeptide phenotype TRH, the pattern spanning adult forebrain, comprising over six different nuclei arise from a dispersed population that is highly regionalized embryonically. Thus a subset of phenotypically distinct neuronal cells develops as a group before distinct forebrain nuclei form, arguing specific neuronal cell fates may be dictated by cell lineage or local induction. The developmental expression of GnRH-I was also studied. Unlike POMC and TRH, GnRH-I was suppressed until metamorphic climax. GnRH cells were first detected after they reached their final position in the preoptic area during the late larval period. A fragment of Xenopus PC2, a prohormone converting enzyme was cloned by PCR and the cDNA used in in situ hybridization as a second phenotypic marker for neuropeptide cells. PC2 was found to be expressed in a highly localized region specific pattern which included TRH neurons. The expression of a new LIM-class family of homeobox genes was characterized from embryo to adult Xenopus CNS. It was found that the Xlim-3 gene was expressed in frog pineal, pituitary, hindbrain and retina. However, it was not expressed in a specific subset of cells in the anterior pituitary or pineal. Xlim-1 was expressed in certain more posterior forebrain nuclei and the expression pattern could include some forebrain cells that express TRH and GnRH, but not POMC. The LIM-class homeobox genes may be involved in the specification of brain cytoarchitecture corresponding to individual brain nuclei including ones expressing specific neuropeptide genes.